Nike Inc

Dick's Sporting Goods' stock crash reveals a major problem for struggling Nike, as the retailer's weak earnings and outlook suggest Nike's turnaround under CEO Elliott Hill may be delayed. Dick's executive chairman Ed Stack cited a "footwear hangover" from legacy silhouettes, with new styles from Nike, Adidas, On, and HOKA driving a reset. Dick's second-quarter adjusted EPS of $3.53 missed estimates of $3.76, and the company cut its full-year EPS outlook to $10.94-$11.94 from $13.27-$14.27, sending shares down 30.7% on Tuesday. Nike's own fiscal fourth-quarter revenue fell 1% to $11 billion, with a projected low-to-mid single-digit decline in the first quarter, and its stock has dropped 38% this year. Jefferies analyst Jonathan Matuszewski noted a "domino effect of pricing pressure" from Nike's markdowns, while Evercore ISI's Michael Binetti sees no reason to expand Nike's P/E ratio from 22 times FY27 consensus EPS.

Dick's Sporting Goods Inc. lowered its full-year outlook amid weakness at its recently acquired Foot Locker unit, overshadowing sales gains during the World Cup. The company now expects net sales to be in a range of $21.9 billion to $22.2 billion in the current fiscal year, down from its previous forecast. The change in outlook was driven by a drop in sales at Foot Locker, the sneaker chain it bought last year for $2.4 billion. Dick's shares sank as much as 12% in premarket trading, while Nike, a major supplier to Dick's and Foot Locker, saw its stock decline as much as 2% premarket. Chairman Ed Stack said conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional, and the company took action to remain competitively priced.

Nike is facing a major business storm after its share price fell around 78% from its late 2021 peak and hit a 12-year low earlier this week, wiping more than 200 billion dollars off its market value before rebounding 2.47% on Wednesday, August 19. Elliott Hill, Nike's CEO, admitted in an internal meeting that he was tired of talking about fixing problems and could not pretend everything was going well. Revenue from Greater China, which includes China, Hong Kong, Macau and Taiwan, fell 12% in the latest quarter, while JPMorgan downgraded Nike from Neutral to Underweight, warning that the Win Now plan would keep pressuring earnings through fiscal 2028. Bernstein maintained its Buy rating with a 68 dollar price target, implying upside of about 70% from current levels.

Nike shares fell 3% to $39.47 on Monday, printing a fresh 52-week low of $39.42 and leaving the stock 51% below its 52-week high of $80.16. The decline came as investors focused on the company's unresolved China problem, where Greater China revenue fell 11% to $5.85 billion and direct digital sales in the region dropped 29% in fiscal 2026. Nike's reported gross margin climbed 890 basis points to 49.2% in the fourth quarter, but 900 basis points of that came from a one-time tariff recovery, leaving underlying margin roughly flat. JPMorgan's $40 sell rating target is now effectively at the market, and a stress scenario stripping out the tariff gain would push Nike's dividend payout ratio above 100%. Peer athletic apparel stocks also fell, with Lululemon down 42% year to date, On Holding down 31%, and Deckers down 10%, while the broad retail ETF XRT remains up 5% year to date, isolating the selloff to athletic apparel.

The temporary 10% global tariff expired on July 24 and was immediately replaced by new Section 301 duties covering the top 60 US trading partners at rates of 10% to 12.5%. Those countries account for roughly 99.4% of all US imports. The legal shift from emergency powers to Section 301 of the Trade Act of 1974 makes the tariffs far harder to overturn in court, signaling they could become a lasting feature of the investment landscape. Nations that adopted or committed to forced-labor import bans pay 10%, while the other 46 pay 12.5%. The market reaction has been muted because the new rates roughly match what was already in place, but structurally a 10% to 12.5% charge on nearly all imports is now a standing cost of doing business.

Nike stock is now underperforming the S&P 500 by the largest margin in 25 years, according to Yahoo Finance AlphaSpace. The stock is down 35% year to date compared to a 13% advance for the S&P 500, and since CEO Elliott Hill officially took over on October 14, 2024, the shares have shed about 49%. In late June, Nike reported fiscal fourth quarter revenue of $11.0 billion, a 1% decline on a reported basis and a 4% drop on a currency-neutral basis, while diluted earnings per share of $0.72 were distorted by a one-time tariff recovery benefit. The company projected fiscal first quarter revenues to be down by a low-to-mid single-digit percentage and reiterated flat earnings per share growth over the next three quarters, excluding tariff recovery proceeds. Analysts from Evercore ISI and Goldman Sachs expressed caution, with Evercore's Michael Binetti noting no clear reason to expand the price-to-earnings ratio and Goldman's Brooke Roach pointing to incrementally cautious macro commentary offsetting near-term business greenshoots.

Nike has notified Pou Sheng International that online sales of Nike products in mainland China will fully cease from January 1, 2027, removing a channel that accounted for about 15% of Pou Sheng's 2025 revenue but only a small share of its profit. The decision is part of Nike's broader marketplace reset aimed at improving margins and supporting full-price sales, though it may temporarily pressure revenue in Greater China. JPMorgan recently downgraded Nike to Underweight, citing a potential US$1 billion China headwind and earnings pressure through fiscal 2028. Nike's investment narrative projects $49.0 billion in revenue and $3.7 billion in earnings by 2029, requiring 1.8% annual revenue growth and a $0.6 billion earnings increase from the current $3.1 billion.

JPMorgan downgraded Nike to Underweight from Neutral, warning that turnaround decisions will pressure earnings through fiscal 2028. Analyst Matthew Boss said actions through calendar 2026 will linger, including a Greater China online marketplace reset starting January 2027 that creates an unmitigated annual revenue headwind of more than $1 billion, or about 20% of the region's revenue, and U.S. store closures that weigh through the first half of fiscal 2028. The firm cut its fiscal 2027 EPS estimate to $1.55, roughly 10% below consensus, and its fiscal 2028 estimate to $1.72, about 20% below the Street, framing fiscal 2028 as a stabilization year. JPMorgan set a December 2027 price target of $40, down from $47, and expects Nike to outline a three-year plan targeting double-digit operating margins by fiscal 2030 at its November investor day.

Nike will stop selling through partner-operated online storefronts in China starting January 2027, a move Bernstein analysts say should lift the company's China operating margins by 200 basis points to 24% in fiscal 2027 but will also erase roughly $1 billion in revenue as the wholesale online channel is wound down. The channel represents a high-teens percentage of Nike's China business, and its elimination is expected to cause a low-teens constant-currency decline in China for fiscal 2027, dragging total company growth by 2 percentage points. Nike's digital presence in China will thereafter be limited to its direct web and app channels and official flagship stores on Tmall, JD.com, and Douyin, a shift aimed at curbing gray-market resellers and deep discounting that management says has hurt brand perception. Bernstein cut its Nike price target to $68 from $72 and lowered fiscal 2027 earnings-per-share estimate to $1.96 from $2.10, while maintaining an outperform rating. The broker named Adidas as the biggest near-term beneficiary, as partners like Topsports and Pou Sheng will need to replace lost Nike online volume, and also sees domestic brands Anta and Li Ning gaining at lower price points.

GE Vernova, up 533% in two years to a $282 billion market cap, could be added to the Dow Jones Industrial Average if Caterpillar issues a stock split to rebalance the index's industrial weighting. Caterpillar and Goldman Sachs together account for over 22% of the price-weighted Dow, and a Caterpillar split would make room for GE Vernova, which would also need its own split from around $1,000 per share to align with the median component price. The author suggests Nike, with the smallest Dow weighting at 0.48%, could be removed to accommodate GE Vernova, citing the athletic wear company's prolonged turnaround. GE Vernova trades at a 30.8 price-to-earnings ratio, but analysts project earnings per share of $30.64 in 2026 and $24.48 in 2027, reflecting potential cyclicality.

Vietnam has been hit with a 12.5% import tariff by the United States, higher than the 10% levied on competitors like Bangladesh, Cambodia, Indonesia, and Malaysia. It has also not been granted access to a new textile mechanism that could lower duties on certain textile products, threatening its position as the largest apparel exporter to the US. The measure took effect on Friday, July 24, 2026, citing insufficient enforcement of forced labor prohibition laws. Vietnam is still in trade negotiations with the US, unlike the four rival nations that have already reached agreements and gained access to the textile mechanism linked to imports of US cotton and raw materials. Vietnam overtook China last year to become the top apparel exporter to the US and is one of the countries with the highest trade surplus with the US. Global brands such as Nike, Gap, Ralph Lauren, and Under Armour use Vietnam as a key production base.

The US will collect duties of at least 10% on imports from most major trading partners, its biggest move yet to reconstruct President Donald Trump's tariff wall that was pierced by the Supreme Court. The new levies, outlined Thursday by senior administration officials, follow an investigation into the alleged failure of around 60 economies to prevent forced labor in their supply chains to the detriment of American workers. Goods from some 10 trading partners deemed to have adopted forced-labor prohibitions will be subject to 10% tariffs, while products from dozens of others will face a 12.5% charge. The new duties take effect Friday at 12:01 a.m. New York time, and they replace a 10% global import tax that expires Friday, ensuring no gap between the two. Imports such as fuel, foods and fertilizers will be exempt, as well as products covered by separate industry-specific levies or the North American trade agreement with Mexico and Canada.

Nike stock is trading 75% from its previous peak following weakening sales growth and margin pressure. The company has been dealing with weak demand for lifestyle products, which account for roughly half of its revenue, and sales decreased 1% year over year last quarter. CEO Elliott Hill acknowledged the turnaround progress is uneven but said management is building Nike for the next decade, not the next quarter. Structural improvements to the supply chain and tighter inventory management are expected to drive earnings growth and stronger margins over the next 10 years. Analysts expect adjusted earnings to reach $2.75 by fiscal 2029, compared to a previous peak of $3.95 in fiscal 2024.

Nike is set to terminate agreements with hundreds of online distributors in China starting January 2027, as part of a major business restructuring plan to revive sales in the Chinese market, which have declined for two consecutive years. The company said it currently has more than 1,000 online sellers in China, and the large number of online stores has fragmented the consumer experience too much, with exceptions for certain authorized partners. Nike's revenue in Greater China has been falling amid competition from local brands and shifting consumer behavior. Under this plan, Nike will increase investment in its own stores, of which it has more than 200 in China, and work with partners to enhance the in-store retail experience. Analysts at Citi view this decision as reflecting Nike's willingness to accept a smaller revenue base in exchange for higher profits, but warn that Chinese consumers may perceive Nike as de-emphasizing the Chinese market. Meanwhile, analysts at Bloomberg Intelligence say it is an effort to regain control of brand image and pricing power, though it may lose market share in the short term.

Nike is ending all online sales of its products in mainland China through distributor Pou Sheng starting January 1, 2027, a channel that accounted for 15% of Pou Sheng's 2025 revenue. Nike shares have fallen 32.11% year to date and 41.45% over the past year, closing at $42.96. The most followed valuation narrative pegs Nike's fair value at $36.83, suggesting the stock is overvalued, while its current price-to-earnings ratio of 20.5 times sits below the US luxury industry average of 21.7 times and a fair ratio of 26.9 times. The company maintains a solid operating margin above roughly 10% and a return on invested capital nearly double its cost of capital, though revenue growth is projected at around 3% over the next couple of years. Investors are weighing weaker demand, the China restructuring, and a slower turnaround against completed buybacks and product plans.

Nike shares are trading 76% below their November 2021 all-time high as of July 16, reflecting ongoing financial struggles despite the company's strong brand. The sportswear giant reported flat fiscal 2026 revenue of $46.4 billion, with net income falling 3% for the year, while Greater China sales dropped 12% in the fourth quarter. CEO Elliott Hill is leading a turnaround effort under the Sport Offense strategy, with North America posting 3% revenue growth and the running category achieving five straight quarters of double-digit gains. However, consensus estimates call for a 1.5% revenue decline in fiscal 2027, and the stock's price-to-sales ratio of 1.4 has not been this low since 2009. The Motley Fool concludes that Nike is not a once-in-a-lifetime buying opportunity and sees no reason for shares to go parabolic soon.

Nike shares fell 36% in the first half of 2026 as flat revenue, tariff-driven margin pressure, and the Iran conflict weighed on the stock. The footwear giant reported flat revenue of $11.3 billion in its fiscal third quarter, with gross margin declining 130 basis points to 40.2%, and warned that gross margin would not return to growth until the second quarter of fiscal 2027. The stock plunged 15.5% on April 1 following the report, and earlier declines in March were exacerbated by the war in Iran, which lifted inflation and threatened consumer spending. Fourth-quarter results released on June 30 showed a 1% revenue decline, but the stock recovered the next day as investors anticipated a return to margin expansion in the new fiscal year.

Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discussed the challenges of the China market and the volatile first half of 2026 for the S&P 500. They noted that 22 S&P 500 stocks doubled or more in the first half, with AI infrastructure plays like Micron and Corning among the winners, while SaaS companies and some consumer brands faced headwinds. The conversation highlighted how China has shifted from a growth engine to a headwind for many U.S. companies, citing Nike's 30% sales decline over five years, Starbucks selling a majority stake in its China operations, and declining market share for non-Chinese automakers. They identified Apple and memory companies as potentially facing similar pressures, with Chinese competitors like Huawei and ChangXin Memory Technologies closing the technology gap. The group also debated whether companies with heavy international exposure are weaker investments today compared to those with more domestic focus, and they addressed a listener question about valuation discrepancies between AI hardware suppliers and software giants.

Nike's investment narrative faces new scrutiny after the company missed out on World Cup final exposure and faced criticism from LeBron James about losing cultural relevance, even as it completed a US$12,124.68 million share buyback program that retired 124,360,522 shares. The missed World Cup spotlight limited Nike's tournament-related brand visibility and merchandise potential at a time when it is trying to reignite momentum through a renewed focus on sport performance and innovation. The completion of the buyback tightens the link between any future earnings recovery and per-share outcomes, but the near-term risk around brand heat and pricing power has sharpened. Nike's own narrative projects $49.0 billion in revenue and $3.7 billion in earnings by 2029, requiring 1.8% yearly revenue growth from a base of $3.1 billion in earnings today, while some optimistic analysts had expected up to $55.7 billion in revenue and $6.0 billion in earnings by 2028. The article notes that if cultural relevance with younger consumers keeps slipping, the hit to pricing power and full-price sell-through could challenge those bullish assumptions.

Nike missed a potentially valuable World Cup finale after Spain defeated Argentina on Sunday, with both finalists wearing Adidas kits. Spain and Argentina had previously eliminated Nike-sponsored France and England in the semifinals, giving Adidas a stronger opportunity to benefit from fan demand for Lionel Messi and Lamine Yamal jerseys. Nike had positioned the tournament as an important opportunity to rebuild momentum in soccer under CEO Elliott Hill's renewed focus on sports, but the result may have limited merchandise revenue. The company also faced criticism over shoulder puckering on some jerseys and production delays that prevented certain tournament inventory from reaching retailers on schedule. Nike remains under pressure to recover from slower sales growth, with weakness in China and the Converse brand, while it sees a significant opportunity in women's soccer ahead of next year's Women's World Cup in Brazil.

The second-quarter earnings season shifts into a higher gear this week, with Alphabet headlining a busy slate of results that will test a stock market near record highs. Alphabet is the first of the so-called hyper-scalers to report, and investors will closely watch any changes to its capital spending plans amid booming AI investment. Other major companies set to report include Tesla, Intel, and American Express, while overall S&P 500 earnings are expected to rise 25.7% from a year ago, according to LSEG IBES data. The European Central Bank is likely to pause its policy rate on Thursday after hiking last month, with all focus on clues about a potential September hike. In sports, Spain defeated Argentina 1-0 in extra time to win the World Cup, benefiting Adidas, which sponsored both finalists, while Nike saw none of its 12 teams reach the final.

Nike has closed two more retail stores, in Cary, North Carolina, and San Jose, California, as part of its national retail strategy. The Fenton shopping center location in Cary shut earlier than its originally planned July 31 closure, while the Santana Row store in San Jose also posted a 'Closed for the next 7 days' message without confirming a reopening date. These closures follow a restructuring launched in April 2026 that has included layoffs of about 1,400 employees, the discontinuation of Nike Fitness Studios, and the consolidation of tech offices. Nike has not disclosed the total number of stores it plans to close.

Nike is at risk of being removed from the Dow Jones Industrial Average due to its low share price and underperformance, with Berkshire Hathaway seen as the ideal replacement. The Dow is a share-price-weighted index, and Nike's stock closed at $44.37 on July 10, the lowest among the 30 components, giving it minimal influence. Since joining the index in September 2013, Nike has gained only 29% while the Dow has rallied 242%, as its direct-to-consumer strategy faltered and damaged wholesale relationships. Berkshire Hathaway, now a trillion-dollar conglomerate built by Warren Buffett, has Class B shares trading at $494, which would fit well among the Dow's increasingly high-priced components. The main hurdle is Berkshire's $349 billion investment portfolio, which already holds stakes in several Dow members like Apple, American Express, and Alphabet, potentially concentrating the index further.

Nike's dividend yield has reached its highest level in history after the company raised its quarterly payment by 3%, marking 24 consecutive years of dividend increases. Based on the current quarterly dividend of $0.41 per share, or a forward annual dividend of $1.64, an investor would need roughly 6,090 shares to generate $10,000 in yearly dividends. However, the high yield comes with risks, as the stock has fallen 76% from its peak amid weaker consumer spending and lower revenue growth. Over the past year, Nike paid out approximately $2.4 billion in dividends while generating just over $1 billion in free cash flow, a gap that is not sustainable long-term. The company attributes the lower free cash flow partly to restructuring costs and investments, and it holds about $9 billion in cash and short-term investments against $7.9 billion in total debt, but investors will need to monitor progress on margins and cash flow.

Jim Cramer has turned bearish on Nike, declaring he is selling the stock after the company's latest quarterly results failed to impress him. Nike reported fiscal fourth-quarter revenue of $11 billion and earnings per share of $0.20, beating analyst estimates of $10.85 billion and $0.12, but Cramer dismissed it as a nothing quarter and pointed to guidance for two more nothing quarters. The stock is down 42% over the past year and 32% year-to-date, and Truist recently reiterated a Buy rating with a $47 price target. Matrix Asset Advisors disclosed a new partial position in Nike, citing an attractive risk/reward after the shares fell more than 65% from their 2021 high of $179.

NIKE shares traded at $42.89 as of July 8, 2026, but a $36 price target and a Zacks Rank of 4, or Sell, suggest the reset effort has not yet created a compelling entry point. The stock’s forward price-to-earnings ratio of 23.02 times sits above the sub-industry’s 20.36 times, the sector’s 16.76 times, and the S&P 500’s 21.14 times, while its trailing multiple of 27.32 times also exceeds the industry’s 26.12 times and the S&P 500’s 26.98 times. Although fiscal fourth-quarter earnings of 20 cents per share beat the consensus estimate of 11 cents and revenue of $10.97 billion topped the $10.85 billion forecast, revenue still fell 1% year over year and management expects a low-to-mid-single-digit decline in the fiscal first quarter of 2027. Greater China revenue dropped 12% on a reported basis in the quarter, NIKE Direct revenue fell 7%, and Converse revenue plunged 32%, while the company’s $9 billion in cash and short-term investments provides financial flexibility. The current fiscal year earnings estimate has been cut 2.49% over the past four weeks and 10.46% over the past 12 weeks, reinforcing a cautious stance until the reset shows sustained, broad-based top-line improvement.

NIKE reported better-than-expected results for its fiscal fourth quarter of 2026, but the beat failed to win over Wall Street. Adjusted earnings of $0.20 per share topped estimates by $0.07, and revenue of almost $11 billion exceeded consensus by over $122 million despite a 1% year-over-year decline. North American revenue surged 3%, boosting wholesale sales, but Greater China sales fell 17% on a constant-currency basis, steepening from a 10% drop in the prior quarter. Greater China accounts for about 15% of the sportswear giant's annual revenue, and sales there are expected to remain under pressure as the company works with retail partners to clear excess inventory. Nike's weak outlook for fiscal 2027, with overall sales expected to continue declining in the first half, further hurt investor sentiment.